Stakeholders Laud, Task CBN on Planned $15trn Infrastructure Fund

Emmanuel Addeh

Several stakeholders have lauded the Central Bank of Nigeria (CBN) on its planned N15trn Infrastructure Fund billed to be launched next month.

The CBN Governor, Godwin Emefiele, had in Abuja at the annual banking and finance conference organised by the Chartered Institute of Bankers of Nigeria stated that the project, which was conceptualised by the apex bank alongside African Finance Corporation (AFC) and the Nigerian Sovereign Investment Authority (NSIA), will help to address the infrastructure deficit in the country.

He said InfraCorp would enable the use of mostly private capital to support infrastructure investment that will have a multiplier effect on growth across critical sectors, while providing reasonable returns to investors.

Former President, Nigerian American Chamber of Commerce (NACC) and Chairman of Tricontinental Group, Olabintan Famutimi noted that while the infrastructure deficits in the country remained worrisome and require interventions like the CBN funding, it was important to manage the funds judiciously.

He urged the government to channel the funds into viable projects with economic benefits instead of politicising economic and business decisions.

He said: “We have huge infrastructure deficit. We need infrastructure but it is more about which infrastructure government is working on, funding source and the conditions of the fund as well as the overall effect on the economy.”

Famutimi insisted that raising fund to finance infrastructure was not enough,, stressing that a critical examination of the economic outlook of the projects and the multiplier effects of on the nation were very important.

In his intervention, former President, Chartered Institute of Bankers of Nigeria (CIBN) and professor of Economics at Babcock University, Segun Ajibola , explainedthat several hundreds of thousands of road network, rail lines, energy and power, water remained critical but are currently in a bad state.

He noted that the deficit constrains the nation’s economy despite the growth in population, urbanisation and technological advancement, adding that the need for the provision of these essential infrastructures remains inevitable yet daunting.

He said: “Hitherto, some reliance had been placed on other sovereigns such as China, international financial institutions such as the World Bank, ADB, etc. But there is a limit to which what Nigeria can attract from these countries and institutions because of the not too friendly conditionalities usually imposed on developing countries like Nigeria.

“Looking inwards in the manner being proposed by the CBN may be helpful. But then, the framework must be right. I will recommend a private partnership via collaborative arrangement between local and foreign interests adjudged competent in providing such infrastructure.”

While stating that such partnership would improve the quality of delivery, performance and accountability, he noted that such interventions were expected to berth with relatively generous terms and business-like template.

He urged the apex bank to introduce a framework for monitoring performance, which must be efficient and effective, adding that there must be a shift from seeing intervention funds as free public funds.

Also, an expert at PWC, Habeeb Jaiyeola, noted that while infrastructure funds are used across the world for the development of critical facilities, adequate planning and strategic contracting must be factored in.

He stated: “It is expected that the N15 trillion fund is channelled into critical infrastructure in the country that will open up sectors and markets as infrastructure challenges have been one of the major factors hindering the growth of some critical sectors in Nigeria.”

Jaiyeola suggested that the N15 trillion infrastructure fund should be administered to complement and align with the plans and projects.

Poor infrastructure has perennially been a major challenge in the country, although it is estimated that Nigeria may require as much as $3 trillion to settle the deficit over the coming years.